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How do I move shares/positions to a new account without changing the cost basis?

LeaningTower

My employer recently changed the record keeper/administrator of our investment plan (i.e. 401k). The new record keeper moved our entire account balances to new accounts with their company, and now we download our transactions from their website.

the first time I downloaded my info to my Quicken file from the new website, all of my existing positions in my investment funds were downloaded as "Bought" transactions. I added a Xin transaction to offset the negative cash balance that the "Boughts" created.

However, now I see that my cost basis was re-set to the value of the positions at the time of the transition, instead of maintaining the original cost basis.

I had the same issue (re-setting the cost basis) when I moved my taxable portfolio from one brokerage to another.

How can I edit or re-enter those transactions to maintain or restore the original cost basis?

Thanks

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Frankx

Hi @LeaningTower

I want to confirm my understanding of what happened with the investments in your 401k account. Is it correct that the investments you held in your account with the former administrator were simply transferred to a new administrator?

If so - assuming that the timing of the transfer is fairly recent - one way to maintain the original cost basis would be to restore a backup file dated immediately before the "transfer" took place and, instead of setting up a new Quicken account for the 401k plan, to simply continue using the old account after deactivating the download connection and changing other account details (such as Customer ID, Account number, Financial Institution, etc.) and then reactivating the account using the new administrator's connection. Doing this will allow you to maintain the account history (including cost basis) and continue to measure performance using the full history of the account.

Let me know if you have any followup questions.

Frankx

splasher

Use the "Shares transferred between accounts" type transaction. It will do a single remove in the source and multiple adds (one for each lot) in the destination. The date will be the date you do it, but Quicken retains both the purchase date and basis for each lot from the source.

Tom Young

Use of the "Shares Transferred Between Accounts" action is the usual way of handling these situations. This action will do a "Remove" action in the "from" Account for each security, and over in the "to" Account the action will do a series of "Adds" - one for each tax lot - with the term of the holding and cost basis preserved.

Sometimes, not always, you can actually continue to use the old Account in Quicken as opposed to creating a new Account. You do this by Deactivating online services in the existing Account and then re-activating downloading, this time pointing to the new financial institution as the custodian of the Account.

Of course before doing either you make a backup of your file in case something goes wrong.

LeaningTower

Hi Frankx,

Yes to your question. (and thanks for the help.) Unfortunately, the transfer of recordkeepers occurred more than one year ago. (I should've researched this a long time ago.)

Could I deactivate both accounts in Quicken, change the info you reference in the original account and reactivate it, then download the historical data to the original account?

LeaningTower

edit:

In the original account, I never downloaded thru Quicken (ie One Step update). I downloaded a QFX file from the record keeper's website. the new record keeper does not offer that option.

LeaningTower

Thanks Tom and Splasher.

Do you see any potential problems if I delete the bought and sold transactions and manually enter the Transfer shares now?

Frankx

Hi again @LeaningTower,

Because of the passage of time since the transfer occurred, I expect that you now have a year's worth of transactions in the "new" account. Therefore, I would suggest that the best course of action would be to use the "shares transferred between accounts" method. And "yes" once you complete the shares transferred - you should delete the "bought shares" transactions that appeared in the new account when it was setup.

Frankx

Jim_Harman

Your FI may not download that far back.

I would do a backup, then delete the transactions that removed the securities from the old account and added then to the new account, then enter a Shares transferred between Accounts to move the shares.

LeaningTower

Thanks everyone for your advice. One more related question:

Due to various factors, the closing balance in the original account did not match the opening balance in the new account. (There were discrepancies between my Quicken account the old recordkeeper's account consisting of fractional shares.)

How would you suggest correcting the discrepancies? My first guess is to use Shares Added/Removed in the original Quicken account before entering the Transfer Shares transactions.

Tom Young

You can use shares Added or Removed to eliminate the discrepancies, but 1st I'd try to figure out what happened and see if you can mimic that. I know that sometimes when shares transfer between financial institutions sometimes fractional shares are "left behind" in the old account, (probably not the case with the 401(k)) or fractional shares are sold and money is transferred instead.

If the amounts are small you might just decide to use Added and Removed anyway, but really there should not be "unexplained differences" more generally.

LeaningTower

Hi guys. I have a wrinkle in this transfer.

All of the funds that I own in this account are privately managed funds. They are not available on any public exchange, and therefore do not have standard symbols that identify them.

Unfortunately, the new record keeper/adminstrator of the plan designated new names for all of the funds. Therefore, if I use Transfer Shares, the prices and portfolio value won't update during future updates. And when I download my regular weekly purchases it will create be to the "new" fund. i.e. an original fund was named Large-Cap equity fund, and the new fund is named Large Cap Equity Index fund-123456.

So this brings me back to the original question: How can I maintain the cost basis of my funds in the new Quicken acct?

Can I use Transfer Shares and then re-name the funds in Quicken to match the name that the new adminstrator uses? and if I do that, will I lose historical pricing?

To Tom Y: The amounts are so small (a few ten thousandths of a share, or less), and I've been carrying the discrepancies for so long that it's probably not worth the effort to reconcile them. In the future, I won't ignore the discreapncies.

Frankx

Hi again @LeaningTower

Regarding the fund name change issue, you should use the "Corporate Name Change" type of transaction. And when you make these entries for each security the "transaction date" should be the date of (or the day before) the first transaction with the new name appeared in download (or on a statement if the entry wasn't downloaded). Changing the name of a security won't affect your historical basis at all.

Frankx

q_lurker

LeaningTower said:

Hi guys. I have a wrinkle in this transfer.

All of the funds that I own in this account are privately managed funds. They are not available on any public exchange, and therefore do not have standard symbols that identify them.

Unfortunately, the new record keeper/adminstrator of the plan designated new names for all of the funds. Therefore, if I use Transfer Shares, the prices and portfolio value won't update during future updates. And when I download my regular weekly purchases it will create be to the "new" fund. i.e. an original fund was named Large-Cap equity fund, and the new fund is named Large Cap Equity Index fund-123456.

So this brings me back to the original question: How can I maintain the cost basis of my funds in the new Quicken acct?

Can I use Transfer Shares and then re-name the funds in Quicken to match the name that the new adminstrator uses? and if I do that, will I lose historical pricing?

To Tom Y: The amounts are so small (a few ten thousandths of a share, or less), and I've been carrying the discrepancies for so long that it's probably not worth the effort to reconcile them. In the future, I won't ignore the discreapncies.

Alternate answer -- I am not suggesting @Frankx's answer is wrong, only that this is different.

The name of security is not critical to its being tracked in Quicken as associated with a real world security. When your new adminstrator sends data to Quicken via Direct Connect or QFX files, Quicken will attempt to match up to what you already have in place. If it finds something already there matching in name and ticker (and CUSIP), it might lock that in as a match without your involvement. (Won't find a match because you don't have tickers).

If it finds a close match on name, it will offer you the chance to say, Yes - what the broker is calling "Large Cap Equity Index fund-123456" is what I already have identified as "Large-Cap equity fund". You can accept that match, point to a different match up, or have Quicken create a new security. (take the first or second choice, if applicable).

So I say, yes you can use the shares transferred and not worry about changing the names. You will not lose cost basis information or historical pricing. Or rename the funds before or after the matching takes place, if it helps.

LeaningTower

> @Frankx said:
> Hi again @LeaningTower
>
> Regarding the fund name change issue, you should use the "Corporate Name Change" type of transaction. And when you make these entries for each security the "transaction date" should be the date of (or the day before) the first transaction with the new name appeared in download (or on a statement if the entry wasn't downloaded). Changing the name of a security won't affect your historical basis at all.
>
> Frankx

Hi Frank and everyone else,

I finally sat at my computer long enough to try to do this. Got the transfers done. when I tried the Corp. Name Change I received an error msg stating: "Security name already in use, please use a new name."

(refresher course: my employer selected a new recordkeeper for our 401k plan approx 1 1/2 years ago. All of my funds/shares/positions were transferred to a new acct with the new record keeper. At the same time, the new record keeper assigned new names to all the funds--which are all privately managed funds, without a ticker/cusip #. Following advice above, I used the "xfrshrs" function to transfer my positions to the new acct in Quicken. I tried using "Corp. Name Change" so I would get updated share prices from the new record keeper.)

Apparently, because I already downloaded transactions from the new record keeper, Quicken won't let me re-name these shares to match the new name. Maybe this would not be an issue if I transferred the shares in Q before doing the first download. But I don't think the new record keeper permits downloading transactions from more than one year ago. So deleting the acct and starting over may not be an option. Can anyone help?

thank you.

LeaningTower

In addition to the issue/question I asked above (about re-naming a security), there is a related issue. The investments were and are actually in 3 separate accounts with each record keeper. I have a 457 plan, a 401k plan and a 401a plan. I hold the same funds in each, which I'll call: Large Cap, Small Cap, International, and Mid-Cap under the old record keeper.

the new record keeper decided to justify their existence by renaming each fund... 3 times! For example, the Large Cap fund was renamed:
Large Cap 111-23 in the 457 accts
Large Cap 111-24 in the 401k accts
Large Cap 111-25 in the 401a accts

So when I figure out how to rename the funds (per my question above), I need to figure out how to rename it 3 times. Is that possible in Quicken? I've been looking at Name Change and Stock Split functions.

(All of this is to retain the original basis information to enable me to track investment performance.)

Thanks to everyone who helps, as well as to everyone who reads my questions but are not able to offer a solution--for your good intentions.

q_lurker

LeaningTower said:

In addition to the issue/question I asked above ...

Let's backtrack a bit -- from the beginning

So your initial downloads from the new guy included Bought Share transactions for (among other funds)

Large Cap 111-23 in the 457 accts
Large Cap 111-24 in the 401k accts
Large Cap 111-25 in the 401a accts

Those three funds are now each separate securities in your Quicken file lacking ticker symbols but each matched to an online security (as reported by the new brokerage). The 'Matched' status is reported on the Security Details. If so matched, then there is also a unique CUSIP identifier associated with each fund (Security Details / Other Info). Please confirm that summary is accurate. This also implies that the pricing for the three may not track identically (price for LC 111-23 may at times be different than for the other two.)

If that is accurate and you want to keep downloading from the new brokerage cleanly, you will need to maintain the separation by account duplicity (unfortunate IMO but maybe required by the pricing issue).

Now you original question was:

How can I edit or re-enter those transactions to maintain or restore the original cost basis?

Even though you moved from (for example) LC-Old to LC 111-23, LC 111-24, and LC 111-25, it may or may not be appropriate to maintain the original cost basis. The real question is whether this would be considered a tax-free exchange. But since all this is occurring in tax-deferred accounts, that is really a moot point that no one would address. No one but me would ask such a question. So my perspective becomes, if you want to maintain the original basis, you can.

My approach would likely be:

Shares Transferred (as discussed above) to move each fund (LC-Old, etc.) to the new account.
Sell those shares at their original cost in the new account
Edit the downloaded Buy Shares transaction to reflect that same total cost basis. That is, if you sold 110 shares of LC-Old that originally cost you a total of $4,560, you are now buying 99.9 shares of LC 111-23 (a different number of shares) for $4,560.
Repeat for each fund in each account.

That bypasses the question of whether you want the new holding to also reflect the date acquired and number of shares for each lot of the original holding. That is, every month you bought a few shares of LC-Old at different prices. As you seek to maintain cost basis, are you wanting to maintain the cost basis of each such lot. I am doubting that but it is your choice. If so, I would use a different approach.

Personally, I would be less inclined to focus on maintaining the cost basis and more focused on matching the real world transactions (LC-Old was exchanged for LC 11-23 at current market values on a specific date). The sequence I outlined above may end up misrepresenting the performance of LC-Old by selling it at below its appreciated value. How else that then alters things is anyone's guess.

HTH

LeaningTower

Hi Lurker

How do you quote selected portions of a post in your response?

"Those three funds are now each separate securities in your Quicken file lacking ticker symbols but each matched to an online security (as reported by the new brokerage). The 'Matched' status is reported on the Security Details. If so matched, then there is also a unique CUSIP identifier associated with each fund (Security Details / Other Info). Please confirm that summary is accurate. This also implies that the pricing for the three may not track identically (price for LC 111-23 may at times be different than for the other two.)"

Most of your summary above is accurate. However, I looked at the info from the new record keeper, and these new securities (LC 111-23, 24, 25) do have ticker symbols in Quicken. The corresponding securities did not have ticker symbols in Qucken under the old record keeper. In the Edit Security Details window, all of them are "Matched with Online Security". The prices of three variants of the securities (111-23, 24, 25) do differ slightly (by a few thousandths of a penny, or less).

"Edit the downloaded Buy Shares transaction to reflect that same total cost basis. That is, if you sold 110 shares of LC-Old that originally cost you a total of $4,560, you are now buying 99.9 shares of LC 111-23 (a different number of shares) for $4,560.
Repeat for each fund in each account."

If I understand you correctly, you are suggesting executing just one sell and one buy for each mutual fund, in each account for the total of the security transferred, not a sell and a buy for each of the dozens (maybe hundreds) of transactions that were created by the transfer function. Is this correct?

"That bypasses the question of whether you want the new holding to also reflect the date acquired and number of shares for each lot of the original holding. That is, every month you bought a few shares of LC-Old at different prices. As you seek to maintain cost basis, are you wanting to maintain the cost basis of each such lot. I am doubting that but it is your choice. If so, I would use a different approach. "

My goal for this whole megilah was to retain the cost basis to enable reporting investment performance. Currently, I cannot run investment performance reports that span the date when the new record keeper took over. (I get an error msg stating that in some cases IRR is above 10,000% or below -1000%) I do not think I need it for tax purposes b/c as you mentioned, these are tax deferred accounts. Because they will be taxed as ordinary income at the time of distribution, I think calculating cap gains will be irrelevant (for income tax purposes).

thanks for the help.

Jim_Harman

Not to further muddy the waters, but cost basis is not used for performance calculations, it is for calculating capital gains.

If you have entered the transfers correctly and you include both accounts in the analysis, the investment performance report should show the performance correctly.

LeaningTower

Thanks Jim. But then why am I receiving the aforementioned error messag when the timeframe for my reports spans the changeover date?

Jim_Harman

Are you looking at the accounts individually or together?

And what time period are you using? The IRR calculation is annualized and may give unexpected results for periods of less than one year.

LeaningTower

Together. Various timeframes, but all longer than one year. Often between 3-7 years.

q_lurker

The housekeeping question:

LeaningTower said:

Hi Lurker

How do you quote selected portions of a post in your response?

Two part answer
1) Across the bottom of the post you may see options for "Flag" "Quote" "Promote" "Off Topic" "Unhelpful" "Helpful". Available options my depend on your 'status' on this site. The "Quote option will paste the entire post in the reply box with a "Username" said: lead in. I will then edit it down to the part I want.
2) The icons across the top of the Reply box may include a Paragraph symbol (backward looking P). If you have written something with your cursor on text, you can click that icon and you'll have the option to set that paragraph in a 'Quote' style. Again, a certain level of membership status may be necessary to get the capability.

The meat of the topic -- Yes, I was suggesting one sell and one buy. You could do multiple buys. If you want every lot converted and maintained, I believe you could do a Mutual Fund Conversion in the new account with LC-Old being converted into LC 111-23 (or 24 or 25 as applicable). That conversion would generate one Remove Shares and multiple Add Shares (one per lot). Some additional cleanup might be required. Post back if you want more thoughts on that direction.

But you've also now turned the objective toward performance measures. I am 'fan' of the Investment Performance Report and related Average Annual Return calculations that Quicken do. I think it is the best offering in the program for that aspect. One key in this type of case is to include the applicable accounts (old and new) and both securities in one calculation. If subtotaled by account or by security, the results can be skewed or deceptive. Make use of the customization options to get the combined picture. I think that reinforces what Jim was saying as well.